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Cabot Energy sees sales prices rise in second quarter, cuts production costs

The oiler reported an average price for its Edmonton Light Oil in the three months of US$48 a barrel, up 9% on the first quarter

Cabot Energy plc - Cabot Energy sees sales prices rise in second quarter, cuts production costs

Cabot Energy PLC (LON:CAB) has seen increased sales prices and cut its production costs in the second quarter of its financial year.

In an update for the quarter and its first half, the oiler reported an average price for its Edmonton Light Oil in the three months of US$48 a barrel (bbl), up 9% on the first quarter.

READ: Junior oiler Cabot Energy raises US$0.5mln from majority shareholder

Meanwhile, Scott Aitken, Cabot’s chief executive, said the firm had also reduced production costs to “less than US$20/bbl” and was currently working to finalise asset-level debt financing to fund its work programmes in Canada.

Detailed proposals have been received from two potential lenders, both of which required production to be increased through a summer workover programme, which the company was considering.

However, the firm added that there were no assurances the proposals would progress and that it was still considering “further equity funding” to support growth.

In other figures for the period, Cabot reported that gross production in Q2 had averaged 459 barrels of oil per day (bopd), down from 781 bopd a year ago.

Sales volumes, meanwhile, had fallen to 41,284 bbls from 73,021 bbls in 2018.

In the update Cabot said that in the first six months of the year, gross production had averaged 485 bopd, down from 761 bopd last year, reflecting deferred production from expenditure on only critical items as well as normal well and field declines.

Sales volumes in the first half also fell year-on-year to 87,555 bbls from 139,632 bbls, with average sales prices down to US$46 per barrel from US$52.83.

Cabot also said that it had sufficient working capital through to the end of August, while it was also reviewing its Italian portfolio amid a suspension of oil and gas exploration in the country following a decree from the government in February.

In early trading on Tuesday, the shares were down 16.5% at 3.6p.

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AIM:CAB
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